Creditworthiness for active parties

What is the process for demonstrating creditworthiness if you are already active?

Below you can read more about what you have to take into account with respect to your creditworthiness if you are a shipper and/or trader and already have a licence.

1. Determining what credit limit and unused credit you need

Your credit limit must at least cover your exposure, but we advise you to maintain an unused credit surplus of at least 15% of your credit limit. Remember to allow for extra unused credit that you may need if you want to make transport bookings in the future. Please be aware that if booking span the end of the year, your exposure may increase (in the event of a tariff increase) or decrease (in the event of a tariff decrease) starting from the new calendar year.

You can increase your credit limit by providing additional securities. GTS accepts the following additional financial securities: parent company guarantee, security deposit and bank guarantee. You can find the standards here. The Bank Guarantee must be issued by a bank with Moody’s long term credit rating of not less than Baa2 or Standard & Poor’s rating of not less than BBB. The lowest rating of the issuing bank shall be applicable. The financial securities must be valid for at least 2 months after the end date of the longest transport booking contract.

You can increase your credit limit by providing additional financial securities on time. You can also ask us to return all or part of your additional securities if you expect you will no longer need the additional credit. If, for example, a transport contract has expired, surplus unused credit becomes available.

2. Determine your exposure

a. Through entering into contract for services

Your initial exposure is determined when you submit your application for a licence. After that, your exposure can change - up or down - if you enter into new service or transport contracts.

You can enter into contracts for new services if you have sufficient unused credit to cover the credit risk associated with the service. To calculate your exposure for the service, take the highest monthly transport booking invoice and multiply this by 3. If it concerns a transport booking for one or two months, you can multiply the amount by 1 and 2, respectively. If your credit limit is not sufficient for your new booking, your booking request will be refused.

Your exposure will be increased by any outstanding transport contract invoices which have been outstanding for more than 60 days.

b. Due to imbalance

Your initial imbalance exposure is determined after you apply for a licence, but you should also take into account your current imbalance. The fact is that your imbalance exposure can be higher, because your imbalance at a particular moment may be greater than the recorded imbalance exposure. GTS determines your current imbalance position daily at 06:00 hours and compares it with your existing imbalance exposure.

The value of the imbalance exposure is the maximum realised imbalance exposure from the last 12 months and consists of the total of:

Financial value of theImbalance Signal (POS);

Outstanding invoice amounts relating to theFlexibility Service;

Financial value of balancing actions;

Outstanding settlement invoices.

If the total of the imbalance exposure comes out at a negative amount, this is replaced by an amount of 0 Euros. The imbalance exposure is adjusted upwards – for a period of 12 months – as soon as on one day the realised imbalance exposure is higher than the maximum value up to that moment.

Protocol for enforcing creditworthiness

Please be aware that if you exceed or threaten to exceed your credit limit, GTS will take the steps set out in the Protocol for Enforcing Creditworthiness. You can find the protocol at the bottom of this page.

FAQ

We will perform periodic credit analyses on your company. We will then set a new credit limit for you and inform you of this.

How long must my financial security remain valid?

The financial securities must be valid for at least 2 months after the end date of the longest transmission booking contract.

Can the amount of credit that I need vary?

Yes, the amount of credit you need varies. Your credit has to cover your exposure. If your exposure changes, this affects the amount of credit you need. Click here for a detailed explanation of how exposure is built up.

- Increase
You can increase your credit limit by providing additional financial securities at the right time. GTS accepts the following additional financial securities: parent company guarantee, security deposit and bank guarantee. You can find the standards here.

- Decrease
You can ask us to return all or part of your additional securities if you expect that you will no longer need the additional credit. If, for example, a transmission contract has expired, surplus unused credit becomes available.

The financial securities must be valid for at least 2 months after the end date of the longest transmission booking contract.

Can I get my financial security back?

Yes, you can ask us to return all or part of your additional securities if you expect that you will no longer need the additional credit. The financial securities must be valid for at least 2 months after the end date of the longest transmission booking contract. If, for example, a transmission contract has expired, surplus unused credit becomes available. Your credit limit must at least cover your exposure but we advise you to keep a minimum of 15% of your credit limit as surplus unused credit. Remember to allow for extra unused credit you will need if you want to book transmission in the future.

Can I change the amount of financial security that I provide?

Yes, the amount of financial security that you provide can be changed. Your credit limit must at least cover your exposure but we advise you to keep a minimum of 15% of your credit limit as surplus unused credit. Remember to allow for extra unused credit you will need if you want to book transmission in the future.